Kentucky First Federal Bancorp announced that the Office of the Comptroller of the Currency has terminated the formal written agreement that had labeled First Federal Savings Bank of Kentucky as a “troubled” institution. The termination was announced on February 19 2026 and ends the individual minimum capital requirements that had been imposed under the agreement signed on August 13 2024.
The OCC’s designation was based on concerns about the bank’s strategic planning, budgeting, succession planning, liquidity risk management, and interest‑rate risk management. The agreement required the bank to submit a three‑year strategic plan to address these deficiencies. By meeting those requirements, the bank has satisfied the OCC’s conditions and is no longer considered a troubled savings association under 12 C.F.R. § 5.51(c)(7)(ii).
First Federal’s capital ratios have consistently exceeded the thresholds set by the agreement, with total capital and leverage ratios well above the required levels. The removal of the troubled designation lifts the valuation discount that had been applied to the bank’s shares and eliminates the reporting and compliance obligations that had constrained its strategic planning and dividend policy. The bank’s capital strength, combined with the regulatory relief, positions it to pursue growth initiatives without the constraints that previously limited its flexibility.
President and CEO R. Clay Hulette said, “We are very pleased to have the Agreement terminated in less than 20 months. We appreciate the OCC’s timely recognition of our achievements and grateful for the hard work of our team to expeditiously address the issues raised by the Agreement.” The statement underscores the bank’s commitment to robust risk management and operational improvement.
With the regulatory overhang removed, First Federal can focus on expanding its community‑banking footprint in eastern Kentucky, enhance its product offerings, and potentially increase shareholder returns through a more flexible dividend policy. The termination signals that the bank’s governance and risk controls have matured, providing a stronger foundation for future growth and stability.
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